EU Car Registration Jumped 18.5%, UK Inflation Held at 8.7%

Bridgette Randall
21 Jun, 2023
Frankfurt

European markets traded down for the third day in a row on valuation worries and economic uncertainties. 

Benchmark indexes in Frankfurt and Paris edged lower but traded near record highs. 

The benchmark index in London declined after the latest inflation data reinforced additional tightening by the Bank of England and core inflation accelerated to a 31-year high. 

The latest inflation data also led many to forecast that the Bank of England may lift interest rates by 50 basis points rather than 25 basis points as had been expected on Thursday. 

Higher interest rates are expected to affect 800,000 mortgages due for refinancing in the second half of this year, according to the financial service industry association UK Finance. 

Higher UK mortgage rates will force most borrowers to cut spending elsewhere, affecting overall household spending and GDP growth. 

Automakers were in focus after new car registration rose for the tenth month in a row. 

 

UK Inflation Held Steady at 8.7%

The consumer price inflation in May matched the April level of 8.7%, the Office for National Statistics reported Wednesday. 

Core inflation, which excludes food, energy, alcohol and tobacco, accelerated to 7.1%, the highest level since March 1992. 

The inflation remained at a 13-month low but significantly above the 2% target set by the Bank of England, adding more urgency to policymakers' tightening campaign. 

Food inflation slowed to 18.3% from 19.0% and energy price decline increased to 13.1% from 8.9% offsetting air travel inflation to 31.4% from 12.6% and recreational and cultural goods and services to 6.7% from 6.3%. 

 

EU Passenger Car Registration Up 18.5% in May

Passenger car registration in the European Union increased for the tenth month in a row, the European Automobiles Manufacturers Association reported Wednesday. 

Passenger car registration increased 18.5% to 938,950 units, and all four largest markets reported an increase. 

Registration in Italy increased 23.1%, in Germany 19.2%, in France 14.8% and in Spain 8.3%.  

Battery powered cars soared 70.9% to 129,847 units, lifting its market share by four percentage points from a year ago to 13.8%.  

Automobile registration in the first five months increased 18% to 4.4 million but still 23% below 5.7 million in the period a year ago. 

 

Europe Indexes & Yields 

The DAX index increased 0.1% to 16,132.61,  the CAC-40 index declined 0.04% to 7,289.96 and the FTSE 100 index increased 0.1% to 7,575.18. 

The yield on 10-year German Bunds inched lower to 2.41%, French bonds traded lower to 2.96%, the UK gilts edged down to 4.41% and Italian bonds decreased to 4.05%.

The euro edged lower to $1.09, the British pound to $1.27 and the Swiss franc to 89.75 cents.

Brent crude increased $0.30 to $76.20 a barrel and the Dutch TTF natural gas decreased €0.82 to €37.89 per MWh.

 

Europe Stock Movers

Automakers were in focus after new passenger car registration in May increased 18.5% following a 17.2% rise in April. 

BMW AG increased 0.6% to €111.20, Stellantis NV added 1.1% to €15.55 and Renault SA jumped 2.6% to €36.44. 

Banks traded higher in the region after UK inflation was ahead of expectations and bond yields advanced on the hopes of a rate hike cycle to continue. 

Deutsche Bank AG increased 1.6% to €9.48, Commerzbank advanced 1.8% to €10.38, BNP Paribas jumped 1.1% to €57.34, Barclays inched lower 0.9% to 152.88 pence and HSBC Holdings Plc advanced 0.4% to 617.50 pence. 

Deutsche Lufthansa AG increased 1.1% to €9.37 after the German airline sold its travel solution business Lufthansa AirPlus Servicekarten GmbH to Sweden-based SEB Kort Bank AB for €450 million. 

VEON Ltd declined 1.4% to 72 euro cents after the company announced its plan to invest $600 million in its Ukrainian subsidiary Kyivstar, the largest mobile telecom network in Ukraine.